Doing business in China and Chinese-speaking countries
With a population of more than one billion, China can be overwhelming at first especially if you’re from a smaller city, but understanding the culture is key.
The population figure alone serves as an insight into the behavioural attributes of the Chinese market; how the Chinese receive information, the amount of information they receive, the array of marketing and media they’re exposed to on a daily basis and the many cities and provinces across the country – all of which have their own unique sub-cultures.
The enriched traditions of thousands of years of languages, cultures, nations and religions is threaded into society, mostly depending on the area you’re visiting. For example, Shanghai is more westernised with a globally savvy and accepting population.
FACTS ABOUT THE CHINESE LANGUAGE
A knowledge of 2000 characters supports basic literacy.
Up to 50,000 characters exist, however only about 8,000 are currently in use. Organisations such as Chineasy are trying to simplify learning Chinese to address literacy rates and improve learning to better reflect today’s world.
Singapore is the only foreign nation to have officially adopted Simplified Chinese.
Chinese (any dialect), does not have a phonetic alphabet, but rather, uses characters to express words, thoughts or principles.
The capital of China is Beijing
Official written language is Simplified Chinese
Calling outside China: Plus Eight Six (+86)
Symbol ¥, the CNY Chinese Yuan
The Chinese language
The Chinese language, namely Standard Mandarin, is the official language of China and is used in Mongolia, Singapore and Taiwan, among others.
In its written form, it’s most commonly used in Simplified Chinese or Traditional Chinese (although there are many more dialects and written forms). Generally speaking, you can associate Simplified Chinese with the spoken language of Mandarin and Traditional Chinese with the spoken language of Cantonese.
Chinese is a language group consisting of many languages, some 13 main dialects, some of which include Standard Chinese/Mandarin, Yue (Cantonese), Wu (Shanghaiese), Minbei (Fuzhou), Minnan (Hokkien-Taiwanese), Xiang, Gan and Hakka dialects.
These are mutually unintelligible to varying degrees, with Standard Chinese/Mandarin (Putonghua, based on the Beijing dialect) being the national language spoken by more than 70% of the population.
Traditional vs. Simplified Chinese Translation
Traditional and Simplified Chinese are the two main written forms for Chinese characters. Simplified is most commonly referred to as ‘Spoken Mandarin’ whilst Traditional Chinese can be associated with ‘Spoken Cantonese’.
If you’re looking for Chinese translation or writing your content in Chinese, the system you select will depend on two things; the location and the people.
Generally speaking, the traditional system is still used in Hong Kong, Taiwan, Macau and Chinese speaking communities outside mainland China (except Singapore and Malaysia). Its form originates from the standardised character forms dating back to the late Han dynasty.
Simplified Chinese however, literally ‘simplifies’ most complex traditional characters/glyphs to fewer strokes, many to common caoshu shorthand variants, and is used across most of China and Singapore.
Doing business tips
Apart from translation tips such as making sure you’ve selected the correct writing system for your target market while using native Chinese translators, cultural barriers can pose challenges for foreign companies, but learning about and respecting local culture can make a good impression on your Chinese counterparts.
Doing business in China requires knowledge of Chinese business culture and etiquette, but it's not a country to approach lightly or bootstrapped, so we've prepared a list of tips below to get you started.
Take your time
A strong negotiating tactic and cultural characteristic that can be used against you if you try to rush things. It is also important to be aware that business hours in China differ from those in western countries.
The Chinese culture is collectivist so it pays to understand cultural dimensions when doing business in China.
Take note of the details
Presentation materials can be prepared in both English and Chinese, and it is a good idea to have a professional translator or interpreter present during meetings. Annual reports and financial statements should also be prepared and presented in English and Chinese.
Ensure you go through the appropriate hierarchy when doing business, even when you greet. Chinese companies often prioritise personal relationships and hierarchies in business relationships. Keep this in mind when greeting a group, and start by greeting the most senior down to the most junior.
Business dress is formal
This means shirt, tie and trousers and if in doubt, just wear a suit. Women in China dress conservatively and formally for work.
Business cards, customs and greetings
Business cards are an important aspect of Chinese business culture, and exchanging them upon meeting someone is standard practice. Cultural customs such as handing your business card with two hands is a must and a sign of respect. Other customs and attention to the details will be of benefit.
Chinese Government and Traditions
It is critical to be aware of Chinese government regulations and policies, including those related to national security and intellectual property rights. Chairman Mao and Chinese traditions remain of significant cultural importance in Chinese society. This can affect how business is conducted and should be kept in mind.
Building strong relationships with Chinese businesspeople and clients is crucial to success in the Chinese market. Don't underestimate the power of lunch, dinner and other entertainment offered - this is usually conducted to judge your character and is an integral part of doing business.
Small talk and building personal connections are often part of Chinese business meetings and can help establish good relationships with your Chinese counterparts.
Joint ventures with Chinese partners can be an excellent way to navigate the Chinese business world and gain access to new markets quicker than trying on your own. Representative offices and limited liability companies are also common business models for foreign businesses in China.
The Chinese economy has experienced significant economic developments in recent years, making it an attractive market for foreign investors and businesses. This has created more competition and opportunity, which you need to keep in mind while doing business.
Multinational companies and foreign brands should be aware of market penetration and competition from Chinese businesses.
Resources to get you started
PWC has some great content on doing business and investing in China, all compiled into one download. https://www.pwc.com.au/publications/doing-business-investing-china.html
DoingBusiness.org highlights China’s current economy and provides a detailed process on how to start a business in China.
King&Wood Mallesons published an enjoyable read on “A Guide to Doing Business in China” https://www.kwm.com/au/en/insights/latest-thinking.html
Austrade has a wonderful section dedicated to China’s Market Profile, Statistics, News and Insights, Events, Visiting tips and more. https://www.austrade.gov.au/australian/export/export-markets/countries/china/market-profile/market-profile